# Child Health Savings Account Act of 2022

This bill creates a new type of savings account specifically for children's healthcare expenses, similar to existing Health Savings Accounts (HSAs) that adults use. Parents would be allowed to set aside up to $3,000 per year per child in a dedicated account to pay for their child's medical costs. The money put into these accounts would be tax-deductible, meaning parents could reduce their taxable income by the amount they contribute, potentially lowering their tax bill.

Before a child turns 18, the account belongs to the parents and they control how the money is used. Any money withdrawn from the account before the child reaches 18 would be taxed as income to the parents, and they'd face an additional penalty tax if the money isn't used for qualified medical expenses like doctor visits, prescriptions, or dental care. Once the child turns 18, the account becomes theirs to manage. At that point, they can only withdraw money tax-free if they're not covered by their parents' health insurance and use it for their own medical expenses.

The bill includes some flexibility for difficult situations. If a child becomes disabled or dies, the parents wouldn't face penalties on remaining withdrawals. Instead, they could move the leftover money into their own retirement account, their own health savings account, or into a child health savings account for another child. This essentially allows families to save money for healthcare costs while getting a tax break, though the practical benefit depends on whether families have the extra income to contribute and whether they have high enough medical expenses to make the account worthwhile.

Child Health Savings Account Act of 2022

Van Duyne, Beth

Child Health Savings Account Act of 2022 This bill allows for the establishment of child health savings accounts for the benefit of the minor children of a taxpayer. These accounts provide for a tax deduction for amounts paid in cash, up to $3,000 in a taxable year, by an individual taxpayer to such accounts. The bill sets forth rules for the taxation of distributions from such accounts for children under and over the age of 18 years and allows for exceptions to such rules in the case of the disability or death of a child.